tv The Last Word MSNBC July 28, 2011 11:00pm-12:00am EDT
you said no. that's "the ed show." i'm asking my colleagues in the senate to pass this bill. >> when the house takes action today, the united states senate will have no more excuses. >> the senate is having trouble passing their bill, i understand. ♪ good evening from new york. we are now in the fifth hour of
chaos in the house of representatives. a vote was scheduled for 6:00 p.m. this evening. at that point, the republican house leadership put out a notice that the vote was delayed. there came a point where they simply closed the doors and started lobbying one on one to try to round up votes for john boehner's bill. johnoehner's deficit reduction bill that would also increase the debt ceiling. house republican whip kevin mccarthy just sent out a message saying, quote, members are advised that there will be no votes in the house tonight. we apologize for the late notice. thank you for bearing with us. and have a good night. republican leadership is not going to have a good night. they had planned for this vote to happen, as i said, five hours ago, but when speaker boehner realized they didn't have the votes to pass that bill, the vote was delayed. that's a standard procedure in
the house when you don't have the votes, just delay the vote. reports from capitol hill say as many as 26 or 28 members of the republican house said they still weren't voting for that plan. speaker boehner could lost as many as 24 votes. the house gop leadership will now make changes to the bill. house rules committee will have an emergency meeting tonight. the bill will be changed, and speaker boehner will try again tomorrow. earlier tonight senator john mccain said what this vote means for house speaker john boehner. >> this is really his leadership of the republicans in the house, and being speaker is clearly at stake here if he can't bring his people along. >> it has been a day of confusion for republicans everywhere, not just on capitol hill. republican senior strategist rush limbaugh is worried that the democrats might be outsmarting the republicans by tricking them into trying to move the boehner bill.
limbaugh is not sure exactly how the republicans should vote on the boehner bill. that's how wild the confusion is on this. listen to rush limbaugh. >> the problem then becomes republicans refuse to compromise, which is what the democrats want all along. meanwhile, republicans think by dumping this in reid's lap that the democrats are going to end up looking like they don't compromise. democrats have it to a head. >> joining me now, white house press secretary jay carney. thank you very much for joining me tonight, jay. >> lawrence, thanks for having me. >> jay, i share a bit, a bit of rush limbaugh's long term confusion here about what it is the democrats really want. the administration started off wanting a clean debt ceiling increase at the beginning of this saga, a one page bill, one sentence, the standard which has been done countless times by congress. you then found yourselves negotiating the biggest deficit
reduction package in history, which every one of these packages would be, the 4 trillion, 2 trillion, any one of them. how did we get to the point where the administration thought just raising the debt ceiling clean is the best way to do this, traditional way to do this to where we are now which is how big a deficit reduction package should accompany it. >> well, i think as the speaker of the house is discovering tonight, it is the reality we all live with here in washington, lawrence, which is this is a divided government, a two-party system. nobody gets entirely what he or she wants, and yes, if we had been doing this in the normal way as has been historically done, there would have been a clean debt ceiling vote, which has traditionally been unpleasant vote often for members of congress, but routine, noncontroversial, and certainly not tied to any deficit reduction package or any other measure for that matter. what happens is the speaker of the house made clear and
republicans in general that they were linking the willingness to raise the debt ceiling to significant deficit reduction. as you know for a long time, we rejected the link, but because we believe we need to reduce our deficit and get our debt under control. we also worked concurrently as we moved through the spring and into the summer on proposals to do just that, reduce the deficit and lower, get control over the debt. now we're in a situation where, you know, these have become inextricably linked, and we don't have an alternative, because the primary objective is to protect the economy and protect the american people. we need to raise the debt ceiling, we need to remove the cloud hanging over our economy now, and we need to reduce our deficit. so i couldn't really make out everything that mr. limbaugh was saying, but i do think there was an opportunity here that once
the boehner bill either passes or doesn't tonight in the house but dies in the senate that we can then move on towards finding a compromise which is exactly what the american people want us to do. >> i couldn't make out exactly what rush was saying either, jay. i played it so people could see how this situation is driving people crazy who can normally follow the general shape of what's going on. i think you've left rush completely confused as the whole process has. >> i was going to say, lawrence, it is a confusing process. that's one of the reasons why we are so insistent that we cannot link the further raising of the debt ceiling to more spending cuts, four, five, six months down the road, because the circus we're witnessing now would just be repeated, causing more problems for the economy, a darker cloud hanging over our economic future, more threats of going into default, which means lower growth, higher interest rates, and fewer jobs. the american people don't want that.
they want washington to work. they're fed up with this partisan stuff. they want compromise. >> jay, as you know, there is question out there about exactly how insistent the president is, and how insistent is he about what. there's nothing that clarifies presidential insistence more than a veto, either a veto threat that's specific or the actual issuance of a veto. how insistent is the president on a single debt ceiling increase? will he veto any bill that does not raise the debt ceiling to a level that gets us through 2012? >> what i will say is that we have been absolutely clear, the president, i and others have been very clear what we are insisting on here, we're very clear about our opposition to the boehner bill, which will never get to his desk, but insistent on why we need to raise the debt ceiling, extend our borrowing capacity so that we can pay bills that have
already been running up and move forward with addressing our other economic problems. you know, hypotheticals aren't worth getting into. one of the things i have said from the podium is that if we are on, you know, in the closing stages of reaching an agreement, you could imagine a situation where for one or two days perhaps you would allow for extension of the debt ceiling, but there is no two, three, four, five month measure, anything that would bring us, revisit the need to raise the debt ceiling in 2012 that's acceptable, not for political reason, lawrence, because i think it is pretty clear as a political matter, the public is very much with us in our approach to this, but for economic reasons. this is terrible for the economy. we're seeing it in clear ways now, and it will only get worse if we continue playing these games. >> jay, the president has taken months to make the case for what he calls the balanced approach, which is deficit reduction that includes spending cuts and tax revenue increases. he made that case at length
monday night in his speech to the nation, but at the same time it seems the administration is accepting the harry reid plan as a possible way to go here, which includes no tax revenue increases. after all of this, arguing for the balanced approach, that includes tax revenue increases, is the president now prepared to sign a deficit reduction bill that has no tax revenue increases? >> well, lawrence, what we have said all along, even before these final stages here is that we believe, the president believes, that we should be reaching for the best, biggest possible deal that achieves the most significant deficit reduction, and the three to four trillion dollar range in ten years, that has always been his goal. to reach that, you need a balanced approach. we are also realistic. that grand bargain if you willis still on the table, the one the speaker walked away from. and while often republicans don't like to admit it, they
came very close to an agreement, and that agreement is still available. if we are not able to achieve that in the next several days, we still need, have no other alternative, have to take action to ensure we don't default and to reduce the deficit because that's also a positive thing and there are cuts we can agree on. the measure that senator reid has put forward includes within it a mechanism by which a joint committee would go to work right away examining ways that we can reduce our deficit further through tax reform, including revenue, and through entitlement reform. the very issues that are the toughest ones that were the focus of the negotiations between the speaker of the house and the president of the united states. we would want to push forward on that. whatever agreement we get that removes this cloud from our economy for the foreseeable future will not be enough, will not be the only thing we will do to address the need to reduce our deficit in a responsible way and to get long term debt under
control. we will keep pushing that, and that will include revenue. >> jay, nothing could add clarity to this process more than a set of possible presidential veto points. is there anything you see that the white house is prepared to say that is within the realm of what's moving in congress, that the president would veto? if you could lay down any veto markers tonight in any of the legislation. >> lawrence, we already said the white house chief of staff made clear he said rather on sunday that the president would veto the boehner bill. there was, you know, this thing you're familiar with, statement of administration policy that we put out a day or two ago that said with regard to that measure that the senior advisers recommend he would veto. all of that has moved. whether it passes tonight in the house, and we have been under the assumption it will pass, totally partisan success, will pass the house, but it dies in
the senate. there are already as you said in the beginning of your show 53, all democratic senators said they would not support the boehner measure, and republican senators said they would not support it, so it's an irrelevance, and now that we have to go through this political side show, we need to get to the business of finding a compromise that can garner democratic and republican votes, and pass both chambers, and be signed into law by this president. and there are avenues for compromise here, and we believe if we can't achieve the grand bargain this week or in the next five days that senator reid's measure is a good thing to start with to find compromise. >> jay, as we approach midnight on monday night, if we can't achieve a grand bargain or a little bargain or a bargain of any size on any version of deficit reduction, will the president demand that congress send him on monday night towards midnight a one sentence, one
page bill, as it has done many, many times as congress knows how to do, in minutes, through both bodies, will the president demand the one page, one sentence clean debt ceiling increase monday night? >> you know, the way these hours and days have been progressing, lawrence, i can't even imagine with that kind of specificity what that night will look like. but i don't think it will look like that. we believe still that in the end, and we're getting towards the end, but in the end, cooler heads will prevail, sanity will prevail in the united states congress, and they will reach a compromise that is acceptable to a majority of folks in the house, to a majority in the senate, a mix of republicans and democrats, which is required to get anything big done, and that can meet the approval of the president of the united states, and that's what the american people want. if there's any lesson we learned through this process, it is that
we're continuing our breaking news coverage of tonight's events on capitol hill. i'm joined now by democratic senator chuck schumer of new york. thank you very much for joining me tonight, senator. >> good morning, lawrence. good evening. feels like morning. >> i know what those hours are like down there.
earlier today you said publicly you had the feeling that john boehner had the votes. you worked in the house of representatives, you're experienced about how the votes get put together. this is extraordinary having to delay a vote. usually as you know, speaker has it lined up well in advance. what do you think is going on over there? >> well, obviously the hard right people in his caucus are resisting. i hear amazingly enough one of the things they don't like is the boehner bill allows pell grants to go forward, helping kids go to college. if most americans knew exactly what was going on in that republican caucus, they'd be amazed, they'd say they don't represent me. >> senator, at the same time you democrats are contemplating the single biggest deficit reduction package ever passed by congress, even in harry reid's version of it, and yet this is being put together without any hearings, without any real evaluation that the public has any chance to look over your shoulders. that's no way to do giant packages like this, is it?
>> well, it shouldn't be. what we should have done right from the get go is done what has been done i believe 39 times in the past, which is raise the debt ceiling. this is the first time we had a group of people, not a majority of the house, not a majority of the congress, not a majority of the american people, but a small group of hard right people who are demanding certain things be done before they raise the debt ceiling, and we have realized, of course, the election did say cut and remove waste from the budget, but it didn't say, it didn't say hold america hostage. you know, what's happening over there, lawrence, is very simple. the speaker continues to throw piece after piece after piece of red meat to the hard right lion controlling his caucus. it is about time he started taping the lion. that's what speakers are supposed to do. you have a small group of people at the extreme who are
dominating the process, and that's hurting everybody. but i have a message for them, and i have a message for all of the republicans, whether they be in the house or senate. we will not agree to a short term deal and go through this again in another three or four months. we absolutely will not. you know, they think if they just throw us this short term proposal that we'll accept it. that's not what's going to happen. 53 democrats already sent a letter saying we're not going to vote for the short term deal, and what will happen at the end of the day is harry reid's proposal, which is more balanced and reasonable and gets us past 2012 will be the last piece of legislation on the floor of the senate. it will be the last train leaving the station, and a yes or no vote on that proposal will be a yes or no vote on whether you want america to default. that's what's going to happen over the next several days. i hope my republican colleagues will think twice about voting
against it. >> senator, that last proposal strategy is always the way the debt ceiling has gotten raised in the past when it's under pressure is we're going to bring up the bill that can do it so late in the game that it's too dangerous to block it or we'll go into default. if the re-bill was blocked, there would presumably still be time on the clock since it only takes minutes to bring up the one page, one sentence version of the debt ceiling we used so many times. in fact, the way it has been raised more times than any other way, and that could be run through the house and the senate if we get to that panic moment and every other bill has been rejected. >> of course, by senate procedures, it couldn't be brought up that quickly as you know, but here's the bottom line. the president feels very strongly about this. senate democrats feel strongly about this. and we believe that the re-bill
will be the final train leaving the station, and here is what else i believe. that some of my republican colleagues in the senate who have really shown an understanding that defaulting would be a disgrace will join us. we're waiting for senator mcconnell to start taking more of a prominent role. he showed by what he did two weeks ago that he realizes the danger of default, both politically and substantively, and he's got to step up to the plate as well. >> chuck schumer, senior senator from new york, thank you very much for joining me tonight. >> nice to talk to you, lawrence. coming up, who's winning, who's losing, and who's staying under the radar at this point in the negotiations. howard fineman and sam stein of the huffington post are my guests. and this is not about the deficit or debt, has never been about the deficit or debt. it has been all about starving the beast.
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this is a challenge for boehner in the house. he must pass a debt ceiling increase in his republican house of representatives. elections are all about politics. then the winners actually have to govern. i can see on election night some of the new members of congress are going to hold the debt ceiling hostage because they wouldn't understand when the politics end and the governing begins. still to come tonight, oh, wait, is this -- it's still there. i don't know. we can't seem to get this new york post headline out of the monitor. we'll work on that. right now, the speaker is trying to drum up the votes to pass his bill. howard fineman and sam stein join me with the latest. and courageous war hero john
mccain retreats when faced with the overwhelming force of sean hannity. that's in the rewrite. somewhere in america, a city comes to life. it moves effortlessly, breathes easily. it flows with clean water. it makes its skyline greener and its population healthier. all to become the kind of city people want to live and work in. somewhere in america, we've already answered some of the nation's toughest questions. and the over sixty thousand people of siemens are ready to do it again. siemens. answers.
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incident spotlight, team huffington is here to tell us who's winning, who's losing, what happens next. joining us now, msnbc political analyst, howard fineman, editorial director at the huffington post and sam stein, reporter at the huffington post. howard you're in the capitol, it is all happening around you. where are we, what's going on? >> well, it takes two reporters from the huffington post, lawrence, to cover the fact that absolutely nothing is happening, which at this very minute at least publicly. behind closed doors, john boehner and there's big crowds of reporters outside his office
for hours, looking to see people coming in, see whether they've had their rear ends realigned by john boehner as they try to get the votes they need. this is crucial. if boehner can pass the republican plan in the house, they will at least, that is the republicans will at least be able to say hey, we put something on the table, and in the physics of blame and in the last phases of negotiations, that would mean something. but he's having a terrible time getting the votes. i just talked to one tea party guy who said look, if not me, when, if not us, who. the way the tea party people view it, they're sort of like the guy in tiananmen square in front of the tank of run away deficit and debt, and they'll be darned if they're going to go along with boehner. that's the problem boehner has person by person as he tries to round up the votes. >> sam, as we all know the truth how governing is done in washington is that when nothing
seems to be happening to us or nothing is happening in front of our cameras, that's when something interesting is happening, because it all happens in the room, behind closed doors. sam, i want to go to you on the issue, there's a group that has not been heard from lately at all, that is house democrats. they are the ignored force in this dynamic. what are they feeling as they watch the president reach out and accept the possibility of a reid bill moving that has absolutely no balancing tax revenue in it to balance the spending cuts. the debate seems to move and shift every day in a way that doesn't ever consult with house democrats. >> and it is ironic because in the end, a portion of that caucus will end up making the deciding vote in all likelihood. one of the points, we don't want to lose this point, this is probably the overwhelming point, which is while the democrats make plays to win this last minute standoff with john boehner, and he is having all
these troubles with members of his own party, in the broader theme, broader war, it is very much a war on republican turf. it is going to be a bill that slashes $1 trillion from the government spending rolls in the next ten years, a bill with no revenues in it, it will be a bill if you're an economics ober, you would think it would hinder recovery efforts. let's not overplay the democratic victory that seems possibly at hand at the last moment because this legislation is very much a republican drawn bill. >> i, for one, cannot see any democratic victory in them legislating the biggest deficit reduction package in history with no tax revenue in it, and without ever having had a public hearing on any of the contents of it. howard, to that point, how would the president explain accepting a bill if he chose to do that, but have no tax revenue in it
after going to the american people this week to talk essentially about nothing else, the need for what he called the balanced approach. >> well, that speech that he gave, lawrence, was really about positioning himself, or saying here is what i had wanted to do, but i couldn't do it. the problem that the president has, and sam kind of alluded to it, is that repeatedly he has given ground on the types of revenues and budgets, not just in this negotiation, but look back. he has given away the store on tax cuts, on bush year tax cuts a couple of times, and he had a hard time defending that position here, and that's why as sam says, as dramatic as this thing is here tonight with boehner, a test of boehner, whether the tea party will go along, et cetera, this is all the republicans' argument now. >> sam, seems to me there may well be an opportune moment in the process for the president to
issue some specific veto threats. there is nothing that strengthens the image of a president more clearly than saying this is what i will not accept. it is also an absolutely necessary guidepost for legislating. knowing what the president will veto is important to the legislative process. >> i don't think it will happen thin debt ceiling debate. but keep in mind, we have a government shut down debate pending in a month and a half when the continuing resolution runs out and after that the bush tax cuts. by all stretch of the imagination, they are not going to get this done now and will have to do it when they set up this super congress deficit commission. i think one thing you can take from the debate, past week and a half, they have seen the white house use the bully pulpit and effectively. public opinion is swaying toward the president now in the debt ceiling standoff, and you're right, nothing says leadership
more than ruling out what you will absolutely not do. >> watching the characters, the one that seems the weariest to me is john boehner. he is the guy who it seems to me even more than the president, at least secretly, doesn't want to have to go through this again. it has ripped him apart. seems to me, howard, is it your sense he would love to be able to get a single vote on the debt ceiling and get rid of it and get it out of his operational area for next year. >> yes. and i think it was jon stewart said upon seeing a picture of john boehner recently that he looked like the world's saddest tangerine. but yeah. this exposes john boehner's weakness. political weakness. this is what he wanted for years, the speaker. he got speakership because of the tidal wave of tea party
people coming in. but be careful what you wish for, having gotten that majority, he can't govern that majority. he is downstairs and we're waiting to see what happens, one by one, pleading with people to try to get the votes he needs, and he is short. according to people i talked to, he is short. it is humiliating, doesn't want to go through it again. i think he will be challenged some point soon whatever happens on the point. >> huffington post, howard fineman, sam stein, thank you both for joining me tonight. >> thank you. >> thank you. coming up, the republicans say they want deficit reduction. what they really mean is government reduction. ezra klein joins me. and an epic battle between partiers is raging. inside the mind of one u.s. senator, john mccain. the rewrite is next. launch me fellas. [ male announcer ] ooh, bad choice. capri sun 100% juice.
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can we -- brian, can you get that thing off the screen because this script here, what we're going to do has nothing to do with any raging boehner. it's not -- can you -- has the murdoch gang hacked our monitor thing and they control it? i am going to do what we have which has nothing to do with that new york post headline, our favorite one of today. the epic battle of john mccain versus sean hannity is in the rewrite. see, has nothing to do with that headline. and republican deficit reduction proposals aren't really aimed at the deficit, they are aimed at something bigger. they don't want to end medicare as we know it, they want to end government as we know it. i guess i am a little closer to that thing. ezra klein is going to join me. as my mercedes collision system automatically kicked in. the next thing i know, the mercedes stopped itself. ♪ watching what mercedes has done in bringing together these sensors in a car
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straight talking john mccain at odds with another republican, double talking john mccain. it all started after mccain delighted many of us by reading from a "the wall street journal" editorial on the senate floor, challenging the prevailing logic among many house republicans and calling house tea party republicans hobbits. >> the idea seems to be if the house gop refuses to raise the debt ceiling, default crisis or gradual government shut down will ensue, and the public will turn in mass against barack obama. republican house failed to raise the debt ceiling would somehow escape all the blame. then democrats would have no choice but to pass a balanced budget amendment and reform entitlements, and the tea party hobbits could return to middle earth, having defeated mordor. this is the kind of crack
political thinking that turns sharron angle and christine o'donnell into senate nominees. >> sharron angle after a series of late night tweets aimed at senator mccain released a proper statement saying this man campaigned for tea party support in his last re-election, but now throws christine o'donnell and i into the harbor with sarah palin. as in the fable, it is the hobbits who are the heros and save the land. this lord of the tarp ought to read to the end of the story and join the forces with the tea party, not criticize it. christine o'donnell said mccain should stop, quote, attacking his party and the grass roots folks that can help drive a solution. and straight talking john mccain took the fight to sean hannity.
it was a preposterous mismatch. john mccain, combat veteran, prison camp survivor, war hero, versus sean hannity, the paper tiger who's never met a war he didn't support, and who's never met a war he was brave enough to participate in. indeed, hannity's combat could you ard he is is so controlling of his behavior, he never considered spending one minute of his life in military service. over air conditioned television studios are the worst work environments he experienced. he has never faced a weaker opponent than sean hannity. what was left of hannity after he stepped up to fight john mccain? let's take a look. >> joining me now, arizona senator john mccain. senator, you know, i read the journal editorial. i am against the editorial. i read the weekly standard. i'm angry at them. the tea party didn't cause the
debt crisis we have, the democrats and obama did. they didn't spend all this money to bring us on the brink of defau default, losing our credit rating. the democrats, the president brought us to this point. why are you attacking the tea party? >> first of all, i was reading from a "the wall street journal" editorial, not exactly -- it was basically attacking the idea that somehow if we shut down the government that then obama would get the blame, and republicans would triumph. i disagree. i think that the fact is that if we don't act in republican house, and i believe by the way that they will, at least i'm certainly hopeful they will, then the ball will be in president obama's court, and harry reid, who has as you pointed out one of the most flimsy, transparent phony spending cut proposals that i've ever seen.
so i wasn't attacking the tea partiers or anybody. what i was trying to point out was the "the wall street journal" was, we need to act with our own spending cuts, our own legitimate spending cuts in that way. then all the pressure will be on the president and the democrats under harry reid. >> what did he say? >> so i wasn't attacking the tea partiers or anybody. >> yeah. that's what i thought he said. and that's funny because this really sounds like attacking the tea party. >> and the tea party hobbits could return to middle earth, having defeated mordor. >> yeah, that's definitely attacking the tea party. but double talking john mccain was suddenly afraid to admit to sean hannity who has sort of a hobbit thing going on himself that straight talking john mccain actually briefly summoned the courage to attack the tea
party. hannity knew he had mccain on the run and he did not let up. >> i take a different position. i see the republicans, you know, literally were competing against themselves, which infuriates me a little bit. this president has not put forward a plan. the tea party is saying wait a minute, this is why we hired you guys, and they're saying we want to cut, cap and balance, a reasonable, responsible bill, and they're asking, you know, for the republicans to stand firm on it. so look, i found this as an attack on the tea party, and if you're agreeing with it, and mentioning christine o'donnell or sharron angle, it sounds like an attack on the tea party. >> primarily if you read the editorial, it was attack on president obama, and the way that they're trying to shift the blame onto republicans, and that's also what i said on the floor of the senate. the president hasn't come forward with a plan. that's unconscionable. that's the worst aspect of leading from behind.
but that doesn't mean that republicans are relieved of their responsibilities. >> okay. so mccain is capable of briefly making sense on o'donnell on the senate floor, that she never should have been the republican nominee for senate from delaware. he can say that sort of thing on the senate floor. but get him in a fox news studio, have him face down sean hannity, and he immediately looks like the guy who could do something as dangerous for america as picking sarah palin as a vice presidential candidate. hannity never let up on mccain. showed no mercy on the senator. enforcing him to rewrite himself on the tea party. so much for straight-talking john mccain. >> look, i -- i just want to make sure that we're on the same page in this regard. the president caused this problem, not the tea party. >> i agree. >> the tea party supported cut, cap, and balance.
>> i agree. >> this president is not leading. >> the tea party, i admire, respect, and appreciate, and they're the ones that gave us a majority in the house of representatives so we can get something done. i'm proud and appreciative of them. >> then democrats would have no choice but to pass a balanced budget amendment and reform entitlements, and the tea party hobbits could return to middle earth having defeated mordor. whoa. right? get. out. exactly! really?! [ mom ] what? shut the front door. right? woop-woop! franklin delano! [ male announcer ] hey! there's oreo creme under that fudge! oreo fudge cremes. indescribably good. can become romantic just like that. a spark might come from -- a touch, a glance -- it can come along anywhere, anytime. and when it does, men with erectile dysfunction can be more confident in their ability to be ready with cialis for daily use.
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that was house minority leader nancy pelosi earlier today. she says republicans aren't interested in reducing the deficit. they are interested in reducing the government. if congress' objective were strictly deficit reinstruction, there is one single way to do that, let the bush tax cuts expire, as they are scheduled to. that would save $4 trillion or more over 10 years, as much or more than the obama-boehner grand deal at its biggest point, and far more than either the reid or boehner proposals currently being floated. and it could be done legislatively by doing absolutely nothing. joining me now is "the washington post's" ezra klein. also an msnbc analyst. ezra, it's the strangest legislative situation i have ever seen. here is the solution to the declared problem, sitting in
front of all of them, the action necessary to make it happen is their favorite thing, doing nothing. and no one talks about it. >> it would let congress do what it is very best at. and it's instructive to compare that situation to this one. in that situation, if congress does nothing, if they can't come to an agreement they are happy with, the deficit improves by $4 trillion, which brings us into the path we need to be on. if we don't agree on anything in the next couple of days, we go into another recession or even worse than that, a financial crisis. so if you cared about that reduction, it's clear what path you would choose. if all you care about is using leverage to impose an ideological agenda, you get where we are now. >> and especially where we are in the economy with this fragile recovery. all of this loose talk i will use the phrase of just cut spending, cut spending, cut spending, in an economy that needs spending, the beauty of
this tax situation is as you approach it on the calendar, you could look at it and say the economy is still too fragile to raise all of these rates. let's just raise the top two, top three, something like that, you could tailor it if you had to. but if the economy reaches the strength that it had in 1993 when it was also coming out of a recession at that time, you could let those tax rates go up. >> and let's be clear. allan greenspan who was a big advocate of the original bush tax cuts has said, it's time to let them go. let them expire. the remarkable thing about washington when it comes to this particular issue is in 2000, we had a big surplus. we seemed to be having economic growth for the foreseeable future, so we made a policy based on that. george w. bush was very clear. we had a surplus. it was the people's money, he was going to return it to the people. we now have exactly the opposite situation. we have a giant deficit. in a totally economic position.
and yet they are saying we need the same policy. we need to agree that this is a different situation than in 1999 or 2000, and change. but as of yet, you have this now more than everism. whatever is going on, well, now more than ever, tax cuts and shrinking government is the answer to it. >> and rarely do we have this laboratory experiment that we can show you, which is, hey, this is exactly what life is like under these tax rates. we can show you from 1993 to 2001, this is what it was. how do you like the look of that economy? >> and this -- obama would say that. he used almost that exact line on the stump. but then you look at their policy, and they say, well, we want to get rid of the very rich tax cuts, $250,000 and above, and extend all the other ones permanently. that puts you far below the revenue that you had with clinton and below what you need in the future, with the retirement of the baby boomers.
it's a huge tax cut compared to what you do if you do nothing. it's a big problem for them and folks who believe that the government can play an active role going forward. if the democrats give up this opportunity in 2012 by letting these tax cuts expire, the republicans won't give them another chance. over time, you'll have to do massive cuts to govern spending. >> the political defense of the president on that tax situation is it was borne on the campaign trail. and it was brave enough for him to say i'm willing to raise at least one tax rate. bill clinton didn't do that. he ran on the middle class tax cut, which then he got rid of it when he became president. so being willing to raise one bracket is about as much as you can ever ask for politically. ezra klein, thank you very much for joining me tonight. >> thank you. you can have the last word online at our blog or follow my tweets @lawrence. "the rachel maddow show" is up next.